With unlimited water available from Washoe Lake, mills were built for reducing ore. Dozens of trips were made daily by mule-driven ore wagons to Virginia City, hauling timber and farm produce. The return trips brought Comstock ore for milling. Water was available in the area, which allowed both quartz and saw mills to be powered. These events lead to the founding of Washoe City.

Washoe City became the county seat of Washoe County when it was created in 1861.